According to StoneX Financial, silver is expected to outperform all precious and base metals by 2025 due to its monetary status and rising industrial demand. StoneX's Rhona O'Connell and Natalie Scott-Gray note that silver, along with copper and tin, will be the best performing metals this year.
The growth of the green and digital transitions favors these metals. Despite a solid performance in 2024, silver is expected to continue to excel in 2025, driven by solar and other emerging technologies. Investment in silver will remain strong, with expectations for its price to reach $33 by year-end.
In summary, 2024 was a transition year for the balance between silver supply and demand, and from the end of 2024 onwards, the market is expected to enter a deficit that will widen in the coming years due to solar energy, artificial intelligence and the electrification of transportation.
The authors also point out that silver has historically been a precious metal because of its use as currency and in jewelry. Although its relationship to gold is important, silver also behaves as a base metal in certain contexts. During recessions in the U.S., its price tends to align more with copper than with gold, while the opposite is true during inflationary periods.
StoneX identifies two main reasons for this duality: the nature of silver's supply and the perception of investors who see it as an affordable alternative to gold. In addition, silver has shown significant volatility, moving at least twice as much as gold in times of conviction.
This year, silver could chart its own course, driven by the solar industry, which uses silver in photovoltaic cells. Demand for silver in solar energy is estimated to grow by 16% annually through 2027. Artificial intelligence will also contribute to the demand for silver, which is needed for the infrastructure to support and transport energy.
Despite the volatility, the revitalization of the gold and silver markets in 2024 has kept investors interested. However, silver is susceptible to impulsive reactions and should be handled with care. Trade policies, such as possible U.S. tariffs on Mexico and Canada, may also affect its market.
StoneX projects silver prices to average $32 in 2025, rising to $33 by year-end, representing an annual gain of 14.1%.
Ernesto Hoffman, Kitco News